Weakening Margins Continue to Decrease Profits in the Canadian Foodservice Industry in 2017


OTTAWA — The Canadian foodservice industry will experience a limited revenue growth of 3.9 per cent this year, its weakest performance since 2011. According to The Conference Board of Canada’s latest Canadian Industrial Outlook: Canada’s Food Services Industry, there will be an increasingly competitive landscape and weakening consumer spending.

“As restaurants vie for Canadians’ food dollars, they will not only be competing against each other for market share, but with grocery stores as well. Dining at home is becoming relatively attractive compared to eating out, given slower growth in income and the fact that prices at restaurants have steadily risen despite a drop in grocery prices over the last year,” says Michael Burt, director, Industrial Economic Trends, The Conference Board of Canada. “Increased competition in the industry may drive the less profitable independent restaurants out of business as they struggle to compete with chains on food prices and keeping up with food trends.”

Although weakening margins continue to decrease profits, the financial picture of the foodservice industry will remain stable through 2017. The number of restaurants in Canada has grown at a rate of 1.8 per cent since 2011 — well above the 1.1-per-cent growth in total population — pre-tax profits in the foodservices industry are forecast to reach $1.6 billion and breakfast has become very popular, accounting for just under one in five restaurant visits.

Canada’s food-manufacturing industry remains a strong performer in the manufacturing sector and can expect solid sales growth of 4.1 per cent in 2017.

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